Microsoft will begin selling worldwide on Tuesday the new consumer version of the Office suite, making it available both via a subscription model and perpetual licenses.
Consumers have historically bought Office in the traditional way, which allows them to pay for the suite once and keep it forever, but Microsoft has made it clear it is partial to the subscription model, where licenses are renewed annually.
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"We think the cloud is the future," said Oliver Roll, general manager of communications for the Microsoft Office Division.
The subscription version, called Office 365 Home Premium, will cost $99.99 per household annually. The software is downloaded -- and later regularly updated -- from a Microsoft data center. The license lets the buyer install the suite on up to five Windows 7 and Windows 8 PCs or tablets, and Mac OS computers. Multiple people in the household can use the suite, each with his or her own account.
The perpetual license version, called Office Home & Student 2013, can be installed on only one Windows or Mac OS computer. It costs $139.99. By comparison, Office Home & Student 2010 costs $149.99 for one household, and includes the right to install the software on up to three PCs.
Both Office Home & Student 2013 and Office 365 Home Premium come with Word, Excel, PowerPoint and OneNote.
However, Office 365 Home Premium includes other goodies, like 20GB of online storage in SkyDrive, 60 Skype world calling minutes per month, Publisher, Access and Outlook. Office Home Premium is available in 162 markets and 21 languages.
Microsoft is also announcing the availability of Office 365 University, which is for university students, faculty and staffers, and can be installed on up to two Windows or Mac OS computers for a $79.99 four-year subscription. It includes the same features and components as Office 365 Home Premium.
With the subscription model, Microsoft is moving away from the historical three-year release cycle of Office, and focusing instead on updating the suite regularly and pushing the changes down to users via the Internet.
"This is the new generation of Office, where it is a service first," Microsoft CEO Steve Ballmer said back in July, when the company released the public beta of this new Office suite.
However, it should be noted that with Office 365 Home Premium most of the software still resides locally on users' machines. In that sense, it's not like its competitor Google Apps, whose applications are hosted on Google data centers and accessed by end users via browsers.
Microsoft does have a scaled-down version of Office that is web-hosted and accessed via browsers called Office Web Apps. Access to it is included as part of Office 365 Home Premium because it is part of SkyDrive.
Office Home & Student 2013 and Office 365 Home Premium have been redesigned to work best with the new tile-based Windows 8 interface, which is optimized for touch screens like those found in tablets but can also be used with keyboards and mice. Along the way, Microsoft has earned applause from analysts and reviewers for simplifying the suite's user interface, which in the past has been criticized for being cluttered and confusing.
Many improvements in the applications themselves have also been well received, including a "read mode" in Word designed to enhance the reading experience, and a PDF "reflow" capability for opening and editing PDF files. Excel's user experience has been made more friendly, and more powerful data analysis tools have been added.
Although Office 365 Home Premium isn't fully cloud-hosted nor browser-based, it is tightly integrated with SkyDrive, so that users are able to save files online. The suite also lets users save their settings and preferences to the cloud and synchronize them across different computers. There is also a feature called Office on Demand that lets users stream a full version of Office on the fly to PCs they don't own for use during one-time sessions.
Microsoft's Roll had no news to share regarding the possibility of a full Office version for iOS devices. He reiterated that Microsoft has developed individual SharePoint, SkyDrive, OneNote and Lync iOS applications, and that Office Web Apps can be accessed via any browser, including Safari on iPads.
Microsoft plans to begin selling the business editions of the new Office at the end of February, and will have full details then about those products.
It previously announced that Office 365 Small Business Premium will cost $149.99 per employee per year, for up to 25 employees. Each employee will be able to install the suite on up to five Windows 7 and Windows 8 PCs and tablets, and Mac OS computers. Office 365 Small Business Premium includes all the applications in Office 365 Home Premium plus Lync Online and InfoPath, as well as Exchange Online -- shared calendars, 25GB mailboxes with virus and spam protection -- and SharePoint Online, which includes 10GB of cloud storage overall plus 500MB per user and tools to create websites.
Meanwhile, the perpetually-licensed Office Home & Business 2013 and Office Professional 2013, will cost $219.99 and $399.99, respectively. They include the same applications as Home & Student 2013 but they add Outlook, and Office Professional 2013 also includes Publisher and Access.
The company hasn't offered new pricing information for the new Office 365 suites for large companies. Like Office 365 Small Business Premium, the new Office 365 suites for enterprises will be based on the new 2013 versions of Exchange, Lync and SharePoint. The existing Office 365 suites for SMBs and enterprises are based on the 2010 versions of those products. Some existing Office 365 suites also offer the option of buying a full-featured Office 2010 suite via a subscription.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.